TMI Blog2021 (7) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... cond presentation cannot be a ground for prosecution under Section 138 of the Negotiable Instruments Act, 1881 as one of the conditions precedent for prosecution i.e the cheque itself should be valid on the date of its presentation, is not satisfied when the cheques are returned as not acceptable to the bank on account of being non-MICR cheques. Whether the cheques bounced upon their first presentation on 11.06.2007 on account of insufficiency of funds can still be taken as a trigger point for constituting offence under Section 138 of Negotiable Instruments Act, 1881? - HELD THAT:- In the instant case, the legal notice was sent on 24.07.2007. Accordingly, if the first dishonour is taken into consideration, the dispatch of legal notice regarding bouncing of cheques, is beyond the time period of 30 days as prescribed under proviso (b) to Section 138 of Negotiable Instruments Act, 1881. Thus, the first bouncing of cheques when read with the date of dispatch of legal notice, also does not help the complainant in any manner whatsoever as one of the conditions precedent as prescribed under proviso (b) to Section 138 of Negotiable Instruments Act, 1881, will still remain unsatisfied. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rguments that legal notice sent under certificate of posting would draw a presumption of deemed service, though under section 27 of the General Clauses Act, 1887 the question of presumption of service of letter arises only when it is sent under registered post, then also the complaint case filed by the complainant in the instant case is pre-mature when considered in the light of the time-lines prescribed under Section 138 of Negotiable Instruments Act, 1881 - the condition precedent for filing the case under Section 138 of the Negotiable Instruments Act, 1881, having not been satisfied, the complaint itself was not maintainable on the day it was filed and accordingly, the petitioner could not have been convicted under the said Section. The question of any presumption regarding existing debt under Section 139 of the Negotiable Instruments Act, 1881 also could not arise as the complaint itself was not maintainable. The impugned judgements of conviction of the petitioner under Section 138 of Negotiable Instruments Act, 1881 suffer from patent illegality and ignoring the mandatory provisions of Section 138 of Negotiable Instruments Act, 1881 with regards to the cause of action as fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er submitted that the legal notice dated 24.07.2007 was said to be sent under certificate of posting and not under registered cover so as to even draw any presumption regarding service of notice. She also submitted that even if 24.07.2007 is take to be the date of dispatch of notice and the deemed service is taken, then at best the deemed service can be taken upon expiry of 30 days from 24.07.2007 and upon expiry of 15 days thereafter, the case could have been filed. In the present case, even if the deemed service is taken, then the notice at best could be said to have been served on 24.08.2007 and the case has been filed on 06.09.2007 which is prior to expiry of 15 days from the deemed service of notice. She submits that this is without prejudice to her argument that there is no evidence, rather no averment in connection with the service of legal notice dated 24.07.2007. The learned counsel has also submitted that in the impugned judgements also, there is no finding regarding service of notice/deemed service of notice to the petitioner. The learned counsel for the petitioner has also submitted that on this short point the matter can be disposed of. 7. The learned counsel submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plainant produced the two cheques for encashment, but both the cheques bounced owing to insufficiency of funds . c. 15.06.07- the complainant met the accused and intimated regarding bouncing of the cheques, but the accused told him to present the cheques again. d. 10.07.2007- the complainant again produced both the cheques for encashment before the bank but the cheques were returned by the bank on the ground of non- acceptable on account of its being non-MICR. e. 24.07.2007 -the complainant sent a legal notice through his Advocate demanding the amount but to no effect and hence the complainant proceeded to file a case against the accused-petitioner. f. The complainant tried to contact the petitioner but could not contact him and the conduct of the petitioner was indicative of the fact that the petitioner did not want to return the money taken as loan as back as in the year 2004. g. It was alleged that the petitioner had well knowledge about MICR cheques and knowingly with intention to harass the complainant, the petitioner had advised the complainant to again produce both the cheques before the bank for encashment. h. 06.09.2007- complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Instruments Act, 1881, the cause of action had crystalized or the complaint itself was pre-mature? Point no. (a) 14. This Court finds that it was the specific case of the prosecution that the cheques were presented for collection before the bank and had bounced due to 'insufficiency of fund' and the complainant had intimated the petitioner about bouncing of cheques on 15.06.2007. It is further the case of the prosecution that the petitioner had asked the complainant to produce the cheque again before the Bank for encashment which the complainant did on 10.07.2007, but the cheques were returned by the bank on the ground of being not acceptable being of the nature of non-MICR. Thus, on the second presentation of the cheques, the cheques had become non- acceptable on account of it being non-MICR cheques. 15. The learned trial Court convicted the petitioner under Section 138 of the Negotiable Instruments Act and has totally ignored the reason for second bouncing of cheques pursuant to Bank memo cover letter dated 10.07.2007 which was marked as exhibit-5 i.e on account of its being non-MICR and not acceptable to the bank, which indicated that the cheques had bounc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) as mentioned above, admittedly, the cheques were accepted by the bank upon their first presentation on 11.06.2007 when they bounced due to insufficient funds. In the present case the legal notice was sent through Advocate on 24.07.2007 on the basis of dishonour of cheques upon second presentation. If the date of bouncing of cheques is taken as 11.06.2007 and its knowledge upon the complainant is taken as 15.06.2007 i.e. the date on which the complainant informed the petitioner regarding bouncing of the cheques, the Legal notice was to be issued to the petitioner within one month thereafter i.e. by 15.07.2007. However, in the instant case, the legal notice was sent on 24.07.2007. Accordingly, if the first dishonour is taken into consideration, the dispatch of legal notice regarding bouncing of cheques, is beyond the time period of 30 days as prescribed under proviso (b) to Section 138 of Negotiable Instruments Act, 1881. Thus, the first bouncing of cheques when read with the date of dispatch of legal notice, also does not help the complainant in any manner whatsoever as one of the conditions precedent as prescribed under proviso (b) to Section 138 of Negotiable Instruments Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the Appellant, this Court had held that it will all depend on the facts of each case whether the presumption of service of notice sent under postal certificate should be drawn. It is true that as observed by the Privy Council in its above referred judgment, the presumption would apply with greater force to letters which are sent by registered post, yet, when facts so justify, such presumption is expected to be drawn even in the case of a letter sent under postal certificate. Considering the facts and circumstances of that case, this Court held the notice sent under certificate of posting to be sufficient service. In the case of Ranju vs. Rekha Ghosh (2007) 14 SCC 81, this court was considering a case where one month's notice was to be given to the tenant for eviction. After considering the provisions of the relevant Tenancy Act, Transfer of Property Act and the Bengal General Clauses Act, it was held that clause (6) provides mere one month's notice , in such event, the said notice can be served in any manner and it cannot be claimed that the same should be served only by registered post with acknowledgement due. In the facts of that case, it was held that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t also considered the earlier judicial pronouncement that the presumption regarding service of notice would apply with greater force to letters which are sent by registered post, yet, when facts so justify, such presumption is expected to be drawn even in the case of a letter sent under postal certificate. 25. In the instant case, admittedly, there is no service report regarding service of demand notice upon the petitioner and what is on record is only the dispatch proof under certificate of posting. The learned Trial Court however convicted the petitioner by recording its finding at para-8 which reads as follows: 8. I have carefully scrutinized the entire evidence available on record. It is evident that the complainant has got all the relevant documents duly proved and on perusal of the documents it appears that the cheques are dt. 03.03.07 and 30.05.07 which have been produced for encashment on 12.06.07 for the first time and on 10.07.07 for the second time which is evident from the bank memo and the letter of Bank of India, JSR, legal notice is dt. 24.07.07, the postal receipt by which the legal notice has been dispatched bears the date as 24.07.07 on its back and the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s after arising of cause of action which is after 15 days from the dispatch/service of notice. Before the appellate court, a plea was raised by the defence that the demand notice was incorrectly addressed and there was non-service of demand notice but the said plea was rejected by recording that the complainant was thoroughly cross examined and there were no material contradiction in his evidence, who was the sole witness of the case. 27. It appears that the learned Trial Court has calculated the cause of action to file the case to be 15 days without making any distinction between the date of dispatch of notice (which was proved) and date of service of notice (which was neither disclosed by the complainant in his complaint /evidence nor proved). The appellate court has not examined the time line regarding filing of case under Section 138 of Negotiable Instruments Act, 1881. 28. Admittedly, there is no service report regarding service of the demand notice. This Court also finds that there is no material circumstance on record to show service of demand notice, much less any particular date of service of demand notice upon the petitioner. 29. In the aforesaid judgement passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the provisions of Section 27 of the General Clauses Act which specifically refers to registered post but has no reference to letters sent under certificate of posting. Accordingly, in absence of any finding regarding any other facts and circumstances proving that the petitioner had knowledge of the demand notice, the demand notice sent under certificate of posting cannot be said to have been served only on the strength of its dispatch proof. Accordingly, the condition precedent for filing of case under Section 138 of Negotiable Instruments Act, 1881 i.e. service of demand notice has not been satisfied and accordingly, the conviction of the petitioner for the offence under Section 138 of the Negotiable Instruments Act cannot be sustained in the eyes of law. 31. Considering the best case of the complainant and even assuming that there is presumption regarding service of the demand notice sent under certificate of posting, the same also does not help the complainant in any manner in view of the following discussions. 32. This Court finds that presumption regarding service of demand notice sent even through registered cover can be drawn only upon expiry of 30 days from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent to take cognizance. A conjoint reading of Section 138, which defines as to when and under what circumstances an offence can be said to have been committed, with Section 142(b) of the NI Act, that reiterates the position of the point of time when the cause of action has arisen, leaves no manner of doubt that no offence can be said to have been committed unless and until the period of 15 days, as prescribed under clause (c) of the proviso to Section 138, has, in fact, elapsed. Therefore, a court is barred in law from taking cognizance of such complaint. It is not open to the court to take cognizance of such a complaint merely because on the date of consideration or taking cognizance thereof a period of 15 days from the date on which the notice has been served on the drawer/accused has elapsed. We have no doubt that all the five essential features of Section 138 of the NI Act, as noted in the judgment of this Court in Kusum Ingots Alloys Ltd. and which we have approved, must be satisfied for a complaint to be filed under Section 138. If the period prescribed in clause (c) of the proviso to Section 138 has not expired, there is no commission of an offence nor accrual of cause of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be on or about 24.08.2007 (30 days from dispatch of legal notice) and 15 days from the date of service of notice would expire only on or about 08.09.2007 and present complaint case has been filed on 06.09.2007. 36. This Court finds that in the light of the judgment passed by the Hon'ble Supreme Court reported in (2014) 10 SCC 713 (Yogendra Pratap Singh -versus- Savitri Pandey and Another), the complaint filed by the complainant is pre-mature as the cause of action for filing the complaint case under Section 138 of the Negotiable Instruments Act, 1881 had not crystalised on 06.09.2007 and accordingly, the complaint itself was pre-mature and hence not maintainable. 37. In view of the aforesaid findings, the condition precedent for filing the case under Section 138 of the Negotiable Instruments Act, 1881, having not been satisfied, the complaint itself was not maintainable on the day it was filed and accordingly, the petitioner could not have been convicted under the said Section. The question of any presumption regarding existing debt under Section 139 of the Negotiable Instruments Act, 1881 also could not arise as the complaint itself was not maintainable. Point ..... 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